(If you know DEFI then you can skip it, it may not be of much help to you. If you are a new user who wants to learn new protocol knowledge in the bear market, I hope it will be helpful to you)
Crv token economic model
1. Liquidity mining rewards: The liquidity mining rewards of CRV tokens are obtained through the liquidity pool provider. Users deposit their funds into these liquidity pools, providing trading pairs to the protocol. In return, they receive CRV tokens, which are calculated based on the amount of funds they provide and how long they are locked. This mechanism incentivizes users to lock up funds for the long term to support the protocol’s liquidity.
2. Governance rights and voting: Users holding CRV tokens have the right to participate in the governance of the Curve Finance protocol. They can vote based on the number of tokens they hold on decisions about protocol parameters, proposal approvals, and other important matters. This decentralized governance mechanism helps ensure that the development of the protocol is consistent with the consensus of the community.
3. Token destruction: The token destruction mechanism of the Curve protocol causes a portion of CRV tokens to be destroyed, thereby reducing the total supply. This burning mechanism helps increase the scarcity of the token and can have a positive impact on the price of the token as the supply decreases.
4. Handling fees and revenue sharing: Transactions in the protocol will generate handling fees, part of which will be allocated to users holding CRV tokens. This mechanism provides holders with a source of income while also encouraging their participation in the use and development of the protocol.
These aspects together constitute CRV’s economic model, making it a comprehensive model covering multiple aspects such as liquidity mining, governance rights, token destruction, fee distribution, and community support. This design aims to incentivize users to participate in and support the Curve Finance protocol and provide appropriate rewards for their contributions.
Uniswap’s economic model is based on the principles of an automated market maker (AMM) and is a key component in the decentralized finance (DeFi) ecosystem.
1. Liquidity providers: Uniswap’s economic model encourages users to become liquidity providers and lock funds in the liquidity pool of the trading pair. Such providers receive transaction fees and token rewards at a risk- and liquidity-based ratio. Their funds support decentralized exchanges and provide depth to the market when prices correct.
2. Transaction fees: Each transaction on Uniswap will generate a certain amount of transaction fees. These fees are allocated to liquidity providers in return for funding the trading pair. The allocation of handling fees is based on the proportion of liquidity provided by users.
3. AMM algorithm: Uniswap uses the Automated Market Maker (AMM) algorithm for trading. The algorithm is based on a constant product formula that calculates the transaction quantity based on the asset quantity and price. This algorithm does not require traditional buy and sell orders, but implements transactions by dynamically adjusting prices.
4. Token pair weight: The token weight in Uniswap’s trading pairs (such as ETH/USDT) affects price and liquidity allocation. The weight of the token can affect the price trend and liquidity distribution of the trading pair, thereby affecting the trading experience of the trading pair.
5. Decentralized governance: Uniswap token holders can participate in the governance of the protocol, deciding protocol parameters, upgrades, and other important matters. This governance power gives community members influence over the evolution of the protocol.
In short, Uniswap's economic model centers on liquidity providers obtaining transaction fees and token rewards, uses automated market maker algorithms to conduct transactions, and allows token holders to participate in decentralized governance. This design promotes liquidity, transactions, and community participation, making Uniswap an important part of the DeFi ecosystem.
The Aave protocol is a decentralized finance (DeFi) protocol designed to provide lending and deposit services while having an innovative economic model.
Aave protocol:
1. Asset lending pool: The Aave protocol allows users to deposit digital assets into the asset lending pool to provide liquidity. These assets can be borrowed by other users, thereby achieving effective utilization of the assets.
2. Flash loans: Aave introduces the concept of flash loans, allowing users to borrow and repay in the same transaction, provided that the borrower can ensure that the borrowing within the same transaction will not affect the overall stability of the lending pool.
3. Interest rate model: The Aave protocol uses an interest rate model to determine the interest rates for deposits and borrowings. This model can dynamically adjust interest rates based on market demand and supply to ensure the stability of the lending market.
Aave economic model:
1. Deposit and borrowing interest: Aave’s economic model generates income by allocating the interest difference between depositors and borrowers. Depositors are rewarded with a portion of the interest paid by borrowers, which incentivizes users to provide liquidity.
2. AAVE Token: AAVE Token is the governance and reward token of the Aave protocol. Users holding AAVE tokens can participate in protocol governance and vote on parameters and protocol upgrades. In addition, part of the protocol revenue will also be used to repurchase and destroy AAVE tokens, thereby increasing the scarcity of the tokens.
3. Liquidity mining: The Aave protocol incentivizes users to provide liquidity through liquidity mining. Liquidity providers can be rewarded with additional AAVE tokens, which helps attract more users to fund the protocol.
4. Protocol fee: Aave has introduced a protocol fee mechanism to use part of the interest paid by borrowers to support the development and maintenance of the Aave ecosystem. These fees help ensure the sustainability and long-term growth of the protocol.
The Aave protocol provides users with opportunities to lend, deposit, and earn through innovative economic models and decentralized lending functions, while incentivizing liquidity provision, participation in governance, and participation in supporting the protocol ecosystem.
Synthetix provides users with alternatives to various financial assets through synthetic asset creation and trading.
1. Synthetic Assets: Synthetix allows users to create synthetic assets that track actual financial assets (formerly stocks, currencies, commodities, etc.) by locking one or more underlying collateral (usually tokens). These synthetic assets are called Synths, and their price and value are tracked through smart contracts.
2. Debt Pool: Synthetix’s debt pool is the sum of the underlying collateral locked in the protocol. Users can lock collateral in debt pools to obtain synthetic assets (Synths) that can be used for trading, investing, or other purposes.
3. SNX Token: SNX Token is the native token of the Synthetix protocol. Users holding SNX can participate in the governance decisions of the protocol and lock SNX in the debt pool to obtain a share of debt to support the creation of Synth synthetic assets.
4. Collateralization ratio: The ratio between the number of SNX tokens users have locked in the debt pool and the value of the synthetic assets they can obtain. The value of the synthetic asset is tied to the value of SNX in the debt pool. Maintaining an appropriate collateral ratio is a key factor in ensuring system stability.
5. Governance rights: Users holding SNX tokens have the right to participate in the governance decisions of the protocol, including parameter adjustments, protocol upgrades, etc. Governance rights ensure that the community can jointly decide the future direction of the protocol.
The Synthetix protocol allows users to create synthetic assets that track the price of real financial assets by staking SNX tokens. This model provides users with diversified investment and trading opportunities, while ensuring the stability and security of the protocol through the mechanisms of debt pools and mortgage rates.
dYdX aims to provide users with the ability to trade leverage and derivatives.
1. Margin trading: dYdX allows users to borrow funds for margin trading. This means that users can borrow funds beyond the amount they actually own in order to increase their speculation opportunities. This can generate higher returns while strengthening market performance, but it also comes with risks.
2. Derivatives trading: dYdX provides a platform that allows users to trade derivatives, such as perpetual contracts. These derivatives allow investors to speculate and hedge based on price changes in the underlying asset.
3. Automatic liquidation: On dYdX, if the value of users’ borrowed funds falls below a certain percentage, their positions may be automatically liquidated to ensure system stability and borrower risk control.
4. AMM (Automated Market Maker): dYdX’s trading model is based on AMM, an algorithm used to execute trades without the need for an order book. AMM automatically adjusts prices based on the supply and demand for the asset.
5. Flash Loan: dYdX introduces the concept of flash loan, allowing users to borrow and repay in the same transaction, provided that the borrower can ensure that the borrowing will not affect the stability of the market within the same transaction.
6. Governance rights: Users holding dYdX tokens can participate in the governance decisions of the protocol, including parameter adjustments, addition of new features, and protocol upgrades.
The dYdX protocol provides users with a platform for leveraged trading and derivatives trading, while using an Automated Market Maker (AMM) algorithm to execute transactions. By introducing flash loans and automatic clearing mechanisms, dYdX aims to provide users with a more efficient, decentralized and innovative trading experience.
GMX～Refer to the previous article for interpretation of the GMX protocol
To summarize the above agreement
Identicality:
1. Liquidity provider rewards (mining)
2. Governance voting rights
3.AMM automatic market maker
4. Agreement business income (the most important success factor)
unique:
Crv's ve model, there was a ve token tide before, and then it was upgraded to Ve33, but the final results ended in failure.
Reasons for the failure of anti-disaster: The agreement has no business income (or insufficient), with Ponzi as the main core, extreme market conditions occur, and at the beginning, the positive flywheel spirals upward🔝When it reaches the extreme value, it becomes a death spiral
Note: No matter how extreme the token model is, without business support, it will be short-lived. Representative: White Lotus Protocol
As for Ethereum and Bitcoin, the token model is not the best, but never compare the protocols that are coming out now because it is impossible to go back to 2008.
Synthetix's synthetic assets can be counted as the original prototype of RWA. This business was later stopped due to policy reasons. At that time, there were real-world assets traded on its protocol. For example, Tesla's stock had a corresponding index on its protocol. , and what RWA is doing now is to give it a compliant coat, and now synthetix has changed the track, but what it did before is indeed a very unique track with great potential, and its founder also has a very strong A capable encryption enthusiast, you can pay attention to it
Derivatives trading of Dydx and Gmx, such as the most commonly used on-chain perpetual contract trading, before the emergence of Gmx, DYDX actually occupied a large market, and the emergence of GMX coupled with the Glp pool mechanism and the recently issued The V2 version has made most of the perpetual contract market on the chain now occupied.
Reason: Improved security, reduced limit orders, transaction fees, etc., and the avoidance of short positions in extreme market conditions are all features that GMX can play, and are also the reasons why other protocols cannot be compared with it, but the most important thing is its liquidity. It's relatively good, and the feedback from business income makes the agreement continue to be a positive flywheel.
